Investigating China's Motorcycling Future
When Andy Warhol rendered Mao Zedong as a Pop Art icon, he foreshadowed the change that made cultural boundaries obsolete. My previous article ("The Great Leap Forward: China becomes a global motorcycle power," Ultimate MotorCycling April 2011), suggested that China is a primary force of change in the two-wheel world.
Returning to the country, for CIMAMotor 2011, the 10th China International Motorcycle Trade Exhibition in Chongqing, the premise was stoked.
China embraces motorcycling, from big Harleys, Hondas, BMWs and Victorys to sport bikes, sidecars, scooters and three-wheel delivery vans. For the masses, it is reliable transportation; for the new wave of high net worth individuals, it is an assertion of success; and for its Generation Y, a hint of how personal conveyance may change in the near future. China is the world's largest motorcycle manufacturer, its leading exporter, and its largest market. It can potentially support and sustain an unprecedented range of products, from designer dreams to "cheap and cheerful."
Jeffrey Wasserstrom's book, China In the 21st Century: What Everyone Needs To Know, summarizes the scope: "China has more millionaires, more cities with populations exceeding one million, more Internet users, and more skyscrapers than any other country." Beyond the numbers, the coexistence of historical and philosophical elements dating back thousands of years with a visible futurism makes the head spin.
While I marveled at how the university students who were translators for visiting media at CIMAMotor were as switched on to Confucius as they were to Gossip Girl, my walks in the countryside showed me that farmers live as they probably have for centuries - their satellite dishes and wireless Internet notwithstanding. And everywhere, a motorcycle of some sort was the family horse.
The 2011 slogan for China's largest motorcycle show proposed an atmosphere of ambition and openness: "Start Changing The Game, Join Us For Lasting Gain." Many aspects of the four-day exhibition spread over nearly 15 acres (whose attendance jumped 40-percent over 2010 to 100,000 physical visitors, with millions of virtual views via the CIMAMotor website, social networks and international media connections) were familiar. The events, crowds, flashing lights, booming music, and beautiful girls framing shiny new machines, could have been anywhere from Minneapolis to Milan, but the rules are different, and one needs to know how and why if one wants to do business.
Statistics tell part of the story. China's 100 million-strong motorcycle population is ten times that of North America. The China Association of Automotive Manufacturers stated domestic brands' production and sales as over 17 million units, with almost a million sold in export markets between January and August 2011.
In comparison, Honda's first quarter 2012 report pegs its annual unit sales in Asia at over 9 million, China reportedly accounting for 1.2 million; US 2011 sales were 185,000, out of the half-million total motorcycles sold in America.
One can argue the meaning of the math, but the fact is two-wheel culture is thriving in a country where motorcycles and scooters are useful, not just high-velocity jewelry. The Chinese motorcycle enthusiast, whether piloting a 65cc runabout on country lanes, steering a commercial tricycle through urban gridlock, or cruising on a big rig, is part of the family of riders.
Western motorcycle brands are trying to carve out their slice of this pate Chinois. The Japanese makes are already embedded in China. As cited by Michael Vaughan in Dealer News, Yamaha, who is manufacturing market-specific models there, "forecasted demand in 2010 to be at 16.5 million units." Honda and Suzuki also have local factories; Kawasaki showed a substantial offering at CIMAMotor 2011.
Meeting with executives for Harley- Davidson and Victory in China, their enthusiasm blended with recognition of the challenge. H-D China's Sean Jiang admitted to issues regarding the sales and registration of large-displacement motorcycles, and hope for resolution. The Motor Company's plan to open approximately 30 stores in the next two years, a 400-percent growth curve, speaks to their commitment.
Victory-Polaris VP of International Operations, and American Motorcyclist Association Hall of Famer, Mark Blackwell was just as energized. "We see global sales as being 50% of our revenue in the near future," he told us, "and China is a major part of that strategy." Victory China executives Jeffrey Zhou and Tony Jiang echoed his sentiments, while the crowd attending the brand launch at the CIMAMotor booth displayed an eager appetite for "The New American Motorcycle."
Italian brands like Ducati, Moto Guzzi, Piaggio, Vespa, Benelli, and MV Agusta are present in China, whether as imports, part of joint ventures with Chinese partners, or owned outright by a Chinese manufacturer.
If China's number one pop star, Jay Chou - who confirmed his movie chops in the Oscar-nominated Curse of the Golden Flower, as well as The Green Hornet - can show off his Travertson V-Rex made by a Frenchman who lives in Florida, in his new music video Dragon Rider, it only proves motorcycling is, like music, a universal language. Globalization is the lingua franca; either one speaks it, or one is missing opportunities for growth.
In conversation with media colleagues at CIMAMotor 2011 from Mexico, Colombia, and Brazil, they confirmed that Latin America is also a major destination for Made In China motorbikes, scooters, and ATVs. The demand for two wheels is out there; it is just different from what we in Western countries have grown to accept over the past quarter century. This underscores the distinctive approach of China's motorcycle industry.
As the head of Zongshen shared with me during my 2010 factory visit, the strategy is to build and sell what the market wants, not to try and create demand for products that outpace the consumer's capacity. This was made even clearer when our group of international correspondents toured the Loncin facility outside Chongqing.
Our guide proudly described the company's sales and profit curve. The leading exporter of Chinese motorcycles (over 800,000 units last year with a value of $370 million), substantial revenue is also generated by its manufacture of motors for weed whackers and lawn mowers one finds in the big box stores with brand names that say "U.S.A." Nothing new, considering Honda has employed a similar diversity in its powersports business model, while Yamaha makes guitars, pianos, and music systems. It tells us that cash-rich China and its motorcycle companies can afford to be patient.
The evolution of China's motorcycle culture evokes a famous interview with Bruce Lee: "You put water into a bottle, it becomes the bottle. Be water, my friend." So far, China's motorcycle industry is flowing to fulfill the same demand it fulfills for so many consumer goods. The premium-priced laptop this article is written on was made in China, and Steve Jobs was not shy about putting his company's world-leading name on it. So, will the day come when the world-class motorcycles and scooters roll off Chinese assembly lines?
Walking the floor at CIMAMotor 2011, the hardware on display may be of smaller displacement, and the stands not quite as slick as New York or Milan, but the customers have cash and are ready to buy. Many of them are under 30, and 28-percent of them are women.
In November, the Chongqing International Expo Center Company Limited announced its "Strategic Cooperation Agreement" with Messe Dusseldorf, one of Germany's leaders in trade fair development. According to CIMAMotor director Wei Wang, "the new center is a high-tech city unto itself." The site plan suggests a venue that reasonably accommodates 500,000 visitors. With a metro area of 30 million, and a temperate climate, matching the motorcycle event power of Milan, Sturgis, and Daytona may only be a matter of time.
That thought persisted as I exchanged a thumbs-up with the owner of a new matte-black Victory Vegas at the CIMAMotor rally in the nearby resort town of Mount Jinfo. Before a parade of iron horses, bonfire blazing, band rocking, and riders partying, Miss Motorcycle Baby was chosen to a backdrop of Britney Spears pumping the beat and straddling a Harley-Davidson V-Rod. I visualized a savvy promoter replicating Bike Week in Chongqing.
The trump card for China's motorcycle companies is that they are under no pressure; their dominance of motorcycle export means their fiscal health is beyond robust. Names like Zongshen, Lifan, Qianjiang, Jialing, Loncin, and Dayang do not yet have the same cachet as Ducati, Honda, BMW, Triumph, Harley-Davidson, and Vespa, but does it matter?
China is fertile ground for a harvest of new enthusiasts, exciting creative minds in the industry. Is tomorrow's motorcycle for this Gen Y rider a hybrid between scooter, mini-car, and modular personal transport? Is it powered by alternative fuels, or electricity? Zongshen has already picked up the gauntlet, reportedly promising to deliver a million e-bikes.
One can say China's motorcycle companies are at a crossroads. They can continue supplying value-conscious customers with affordable product, or they can help lead the industry, and the world, into an exciting new future. China produces world-class classical pianists, basketball stars, and gymnasts, and has launched its space platform with lunar ambitions.
There is no telling what it can do when its best minds and deep pockets team up. The Chinese motorcycle industry is headed further on up the road of profitability. Where that road leads, remains, for now, a secret.
As we moved from exhibition hall to exhibition hall at CIMAMotor, pondering these and other questions, Ultimate MotorCycling president Arthur Coldwells was succinct in his commentary: "If I have one word to describe China, it's 'juggernaut.'"
Story is from a previous issue of Ultimate Motorcycling...for a digital version, click here.